The growth of biomass for use in manufacturing pharmaceuticals, human and animal foods, and gaseous and liquid fuels requires improvements in cost efficiency and land usage in order to be economically viable on a large scale. For example, soybean oil is increasingly used as a feedstock for producing biodiesel, but is often more expensive than crude oil and yields only about 60 gallons of biodiesel per acre per year.
From 1978 to 1996, the U.S. Department of Energy's Office of Fuels Development funded a program to develop renewable transportation fuels from algae. The main focus of the program, known as the Aquatic Species Program (or ASP) was the production of biodiesel from high lipid-content algae grown in ponds, utilizing waste CO2 from coal fired power plants. The end result of the study was the recognition that additional work is needed in order to reduce production costs to the level where biodiesel from microalgae can compete with petro-diesel. The ASP research focused on growing organisms in open ponds (with circulation) but ignored the scientific potential of closed systems because it was believed that such systems would be too expensive to allow cost competitiveness with petroleum. Unfortunately, open-pond systems had insurmountable problems with contamination and most development efforts today are focused on closed systems. The fact that petroleum prices have risen significantly, in real terms, since the end of the ASP effort has given added impetus to the drive to develop high-volume bioreactor systems with the potential to grow biomass at low unit costs.